EU calls for 40% reduction in greenhouse-gas emissions by 2030

The European Commission’s strategy to reduce pollution, curb rising energy costs and overhaul renewable-energy policies in the next decade would require an average annual investment of 38 billion euros ($52 billion) in the 28-nation bloc, the region’s executive arm said today.

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By EWA KRUKOWSKA

Bloomberg

The European Union proposed cutting the regions
greenhouse-gas emissions by 40% by 2030, accelerating its
efforts to fight climate change.

The European Commissions
strategy to reduce pollution, curb rising energy costs and
overhaul renewable-energy policies in the next decade would
require an average annual investment of 38 billion euros ($52
billion) in the 28-nation bloc, the regions executive
arm said Wednesday in a statement.

The current goal is to cut emissions by 20% in 2020 from 1990
levels, a pace that would lead the EU to a 32% reduction of
greenhouse gases by 2030.

The proposed design of future policies pits nations including
Germany and the UK, who are seeking stronger efforts to
protect the atmosphere, against Poland and its allies, which
rely mainly on fossil fuels to keep their economy
humming.

It also highlights the divide between energy intensive
companies, whose gas and power costs are more than double
their US and Asian competitors, and green lobbies such as
Greenpeace seeking deeper emission cuts.

The 40 percent greenhouse-gas target is probably the
maximum of what can be achievable if you want to unite all
these forces, EU climate commissioner Connie Hedegaard
said in an interview in Brussels. This is the common
denominator that weve been looking for for years.

The strategy is the start of a debate among member states,
which may lead to a draft law in early 2015. It also includes
an EU-wide target to boost the share of renewables in energy
consumption to 27% by 2030 and may include a pledge to boost
energy efficiency later this year, the commission said.

First Step

The proposal is an important first step to restoring investor
confidence in the EUs vision for a low-carbon energy future, according to
Stephanie Pfeifer, CEO of the Institutional Investors Group
on Climate Change in London, which represents more than 85
companies with assets of 7.5 trillion euros. The EUs
long-term goal is to cut greenhouse gases by at least 80% in
2050.

The spending required to meet the targets will be to a large
extent compensated by fuel savings, according to the
commissions president Jose Manuel Barroso.

Global Action

We show that European leadership in global
climate action is beyond doubt and we show that we can do
that in a way that is beneficial for economy, Barroso
said at a conference in Brussels. What were
proposing today is ambitious and affordable.

The commission asked member states to consider a 2030
framework that focuses on the carbon-reduction target to avoid
conflicts with policies subsidizing renewable energy,
according to the strategy document. The EU wont extend
legally-binding renewables targets for individual member
states beyond 2020, instead setting an EU-wide goal,
according to the document.

Scrapping renewable energy targets is good news
for the economy and environment, according to Robert
Stavins, director of Harvard Universitys Environmental
Economics Program. The renewables goal conflicts with the EU
emissions trading system and
removing it would lower the cost of achieving the pollution
cap, he said.

Binding Target

The European Environmental Bureau, the regions largest
federation of environmental citizens
organizations, has called on policy makers to reduce carbon
discharges by at least 60%, set a binding target for
renewables at 45%.

The Commissions proposal falls well short of what
science tells us is needed to address the devastating
consequences of climate change and shows a serious lack of
vision and leadership by President Barroso, said Jeremy
Wates, EEB secretary general in Brussels.

The commission also seeks to strengthen its emissions trading
system from 2021 by making the supply of permits fall when
theres an accumulated surplus of at least 833 million
metric tons. Thats less than half of the glut estimated
to be about 2.2 billion permits by the end of last year,
according to Bloomberg New Energy Finance in London. If the
surplus drops below 400 million, the bloc would begin
returning allowances from the reserve to the market,
according to the document.

12,000 Companies

To align the cap-and-trade system, which puts emission limits
on about 12,000 companies, with the proposed 2030 climate
target, the annual pace of carbon cuts in the ETS would
accelerate to 2.2% from 2021 from 1.7% currently, according
to the commission. No international credits would be allowed
in the program after 2020 unless negotiators worldwide reach
an ambitious deal at a climate summit in Paris next year.

The cost of emitting a ton of carbon dioxide in the EUs
$53 billion carbon market slumped to a record
low of 2.46 euros in April and traded at 5.16 euros Wednesday
on the ICE Futures Europe exchange in London.

EU heads of state will discuss the package at a meeting in
Brussels starting March 20. Energy and environment ministers may take up
the debate in May in Athens. The commissions ambition
is to have a political decision on the direction of future policy in time for a Sept. 23
summit, where UN Secretary General Ban Ki-Moon is seeking
pledges that can underpin a global treaty limiting emissions to be approved in 2015.

The EUs regulatory arm may then propose draft
legislation by the first quarter of 2015, in time for the UN
global warming talks that culminate in December of that year.

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